Australian Community Pharmacy Authority v Eaves, David William Low, Lawrence v Lapsley, Helen and Ors

[1997] FCA 1000

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - decision by Australian Community Pharmacy Authority - power of authority to grant an extension of time - power of Administrative Appeals Tribunal
National Health Act application for approval for relocation of pharmacy - legal right to occupy premises - whether includes lawful use under town planning scheme - whether failure to take into account a relevant consideration.
Deferral of application for approval while another application under consideration - delay in raising issue - whether postponement of consideration unreasonable

PROCEDURE - entitlement to cross-appeal as a respondent to an appeal - whether affected by the order sought on appeal

National Health Act 1953 (Cth) ss 90(1), (3), (3A), (3B), (14), 99K, 99L
Administrative Appeal Tribunal Act 1975 (Cth) s 43(1)
Administrative Decisions (Judicial Review) Act 1977 (Cth) s 11(c)
Federal Court Rules o 53 r 13, 5(2)

Pharmacy Restructuring Authority & Anor v Chatfield (1993) 43 FCR 418 Cons
Hunter Valley Developments Pty Ltd v Cowan (1984) 3 FCR 344 Cons
Thornton v Repatriation Commission (1981) 35 ALR 485 Cons
Raw v Pharmacy Restructuring Authority (unreported decision of Lockhart J) 25 June 1993) Cons
Rogers v Australian Community Pharmacy Authority (1996) 42 ALD 1 Cons

Australian Community Pharmacy Authority v David William Eaves
QG 68 of 1997
Lawrence Low v Helen Lapsley, John Daffey, Margaret Fois, Ric James and Merilyn Woodward in their capacity as Chairperson, Members and Secretary of the Australian Community Pharmacy Authority, David William Eaves, Keith Lewington Beddoe and Andrew Podger, Secretary of the Department of Health and Family Services
QG 90 of 1997

Kiefel J
24 September 1997
Brisbane

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 68 of 1997

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY MR K L BEDDOE (SENIOR MEMBER)

BETWEEN:	AUSTRALIAN COMMUNITY PHARMACY AUTHORITY APPLICANT
AND:	DAVID WILLIAM EAVES RESPONDENT

AND:

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 90 of 1997

BETWEEN:	LAWRENCE LOW APPLICANT
AND:	HELEN LAPSLEY, JOHN DAFFEY, MARGARET FOIS, RIC JAMES AND MERILYN WOODWARD IN THEIR CAPACITY AS CHAIRPERSON, MEMBERS AND SECRETARY OF THE AUSTRALIAN COMMUNITY PHARMACY AUTHORITY FIRST RESPONDENT
AND:	DAVID WILLIAM EAVES SECOND RESPONDENT
AND:	KEITH LEWINGTON BEDDOE THIRD RESPONDENT
AND	ANDREW PODGER, SECRETARY OF THE DEPARTMENT OF HEALTH AND FAMILY SERVICES FOURTH RESPONDENT

JUDGE:	KIEFEL J
DATE OF ORDER:	24 SEPTEMBER 1997
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

In the matter QG 68 of 1997:
THE COURT ORDERS THAT:

1. The appeal be allowed.

2. Paragraph (b)(ii) of the decision be set aside and substitute the following provision:

   “(b)(ii)This recommendation for approval shall lapse if the applicant has not been granted approval within six months after the date of the Tribunal’s decision or such further period as the Australian Community Pharmacy Authority may allow on application by the applicant”.

3. The Notice of Motion dated 11 July 1997 be dismissed.

4. Lawrence Low be granted an extension of time to file an appeal.

5. The appeal, filed by leave, be dismissed.

6. Lawrence Low pay the costs of and incidental to the appeal filed by leave.

In Matter QG 90 of 1997:
THE COURT ORDERS THAT:

1. The Notice of Motion dated 11 July 1997 be dismissed.

2. Lawrence Low pay the costs of and incidental to the Notice of Motion.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 68 of 1997

ON APPEAL FROM THE GENERAL ADMINISTRATIVE DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY MR K L BEDDOE (SENIOR MEMBER)

BETWEEN:	AUSTRALIAN COMMUNITY PHARMACY AUTHORITY APPLICANT
AND:	DAVID WILLIAM EAVES RESPONDENT

AND:

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 90 of 1997

BETWEEN:	LAWRENCE LOW APPLICANT
AND:	HELEN LAPSLEY, JOHN DAFFEY, MARGARET FOIS, RIC JAMES AND MERILYN WOODWARD IN THEIR CAPACITY AS CHAIRPERSON, MEMBERS AND SECRETARY OF THE AUSTRALIAN COMMUNITY PHARMACY AUTHORITY FIRST RESPONDENT
AND:	DAVID WILLIAM EAVES SECOND RESPONDENT
AND:	KEITH LEWINGTON BEDDOE THIRD RESPONDENT
AND	ANDREW PODGER, SECRETARY OF THE DEPARTMENT OF HEALTH AND FAMILY SERVICES FOURTH RESPONDENT

JUDGE:	KIEFEL J
DATE:	24 SEPTEMBER 1997
PLACE:	BRISBANE

REASONS FOR JUDGMENT

On 8 May 1995 Mr Eaves applied to the Australian Community Pharmacy Authority (“ACPA”) for approval to supply pharmaceutical benefits under s 90(1) National Health Act 1953 (Cth) from premises described as 1-5 Redland Bay Road, Thornlands. These premises were different from that for which an approval had already been held and which was situated at Wynnum North. Consideration of the application was deferred until the determination, on 28 June 1996, of a prior application concerning premises also at Thornlands (see Re Teys and Australian Community Pharmacy Authority;  Eaves (party joined) (1996) 41 ALD 689).

On 11 July 1996 Mr Low also applied to the ACPA for approval with respect to premises at Thornlands.  On 22 August 1996 the ACPA considered Mr Eaves’ application but not that of Mr Low.  Mr Low was notified on 26 August that his application  “… was not considered … at its recent meeting of 22 August 1996 as an earlier application for the same area was to be considered at the same meeting.”  On 28 August 1996 Mr Eaves was notified that the ACPA intended to recommend against approval of his application and he filed an appeal with the Administrative Appeals Tribunal on 23 October 1996.  Mr Low was joined as a party to that appeal.  Mr Low was subsequently informed by the ACPA, in early 1997, that his application could not be further considered until the appeal process with respect to Mr Eaves’ application had been concluded. 

The Decision
On 15 May 1997 the Tribunal decided that Mr Eaves’ application should be remitted to the Secretary of the Department of Health and Family Services with a recommendation to approve the application taking into account that the applicant now complies with the Minister’s determination.  This conclusion had been reached on materials available to the Tribunal, but which had not been available before the ACPA.  The Tribunal however went on to provide:

“(ii)       This recommendation for approval shall lapse if the applicant has not been granted approval within six months after the date of the Tribunal’s decision or such further period as the Tribunal allows on application by the Applicant.”

The ACPA’s appeal to this Court concerned only that part of the Tribunal’s decision which suggested that the Tribunal itself might determine an application for extension of time with respect to the recommendation for approval, on the basis that it was not within the Tribunal’s powers.  None of the parties contest the correctness of the appeal.

The substantive part of the Tribunal’s decision, of compliance with the Minister’s Determination, is not the subject of any appeal by the ACPA or by Mr Low, subject to his application for leave to bring such an appeal.  It concerns the question which had been posed by the parties for the Tribunal, namely whether a “legal right to occupy” premises referred to in the rules under the Minister’s determination requires more than what follows from an agreement to lease and in particular whether it requires rights or permissions under the relevant Town Planning Scheme. 

The evidence before the Tribunal disclosed that Mr Eaves’ service company held a lease from a Dr and Mr Wardle in respect of premises at 3 Redland Bay Road.  The premises were identified on a site plan and is part of a proposed medical centre.  The service company had granted a sub-lease of those premises to Mr Eaves.  The proposed development for 3 Redland Bay Road had been the subject of an application for “consideration in principle” to the relevant local authority with respect to the use of a medical centre which incorporated the pharmacy.  Delay was encountered when it was realised that a pharmacy was classified under the Town Planning Scheme as a “shop” which was a prohibited use and one which therefore required an application to rezone the land before the use could be lawfully carried out.  There was some evidence from a Town Planner to the effect that this would ultimately have been achieved, but a rezoning had not been granted when the Tribunal heard the matter.  The Tribunal determined that the lease and sublease provided the necessary legal entitlement to occupy.  The question of necessary Town Planning approvals was considered to be a matter for the local authority.  It was clearly not considered by the Tribunal to affect the question raised by the statute and rules. 

The Legislative Framework
Under s 90(1) National Health Act a pharmacist who wishes to supplying pharmacy benefits at particular premises may apply to the Secretary to the Department of Health and Family Services who may approve that pharmacist for the purpose of the supply of pharmacy benefits at or from those premises.  Subsection (3) of that section concerns an application to supply pharmaceutical benefit from premises other than those to which an approval has already been granted.  In a case such as the present the application is required to be referred to the ACPA (see sub-s 3A).  Under the section an approval may be granted by the Secretary only if the ACPA recommends the grant of the approval “but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority” (sub-s 3B). 

Subsection (4) makes clear that the Secretary is not authorised to grant approval to a pharmacist:

“…in respect of premises at which that pharmacist is not permitted, under the law of the State or Territory in which the premises are situated, to carry on business”.

It was pointed out on the hearing of this appeal that the Secretary also has power to later cancel an approval, on notice, where the Secretary is satisfied that a pharmacist having an approval is not carrying on business at the premises the subject of the approval. 

The functions of the ACPA, pursuant to s 99K, are to consider applications including those under s 90 and to make recommendations whether the applicant should be approved in respect of particular premises. In doing so the ACPA must comply with the relevant rules determined by the Minister under s 99L (s 99K(2)). The relevant determination of rules (a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901: see s 99L(2)) was that coming into operation on 1 January 1996. Rule 6, which relates to the circumstance where it is desired to relocate an existing approval to other premises provides:

“6.        Subject to paragraph 8, approval of a pharmacist (the applicant) under section 90 of the Act in respect of particular premises must be recommended if the applicant has a legal right to occupy those premises, and …”

The rule goes on to provide that a recommendation must be made if the applicant already has an approval with respect to other premises or another approved pharmacist (the vendor) proposes to cease supplying and wishes the applicant to have the approval.  The rule requires reference to particular circumstances.  For example they have regard to the distance of the premises from which pharmaceutical benefits are already being supplied, from those the subject of the application.  The ACPA may also take into account a perceived community need for a pharmacy.  How this is to be determined, with respect to a particular population catchment area, is dealt with under rule 2.  None of these matters arises for consideration in this case.  The only issue is whether there existed the factor which would require the recommendation of an approval, namely that Mr Eaves had a legal right to occupy the premises in question.

So far as concerns the ACPA’s appeal, rule 9 also provides:

“9.        Where the authority recommends the approval of the pharmacist under s 90 of the Act in respect of particular premises, it must also make a recommendation that the recommendation for approval will lapse (unless the Authority on application by the pharmacist, has granted an extension of time), if the pharmacist has not been granted that approval within six months after the day on which the pharmacist is notified of the recommendation for approval.”

The Authority’s Appeal
Section 43(1) of the Administrative Appeal Tribunal Act 1975 (Cth) provides that, for the purpose of reviewing a decision, the Tribunal may exercise all of the powers and discretion conferred by any enactment upon the decision-maker and that the Tribunal has power to affirm vary or set aside “the decision under review” and make a decision in substitution for the decision.  That decision is thereupon deemed to be that of the decision-maker, here the ACPA (See sub-section 6). 

It will be observed that the provisions of rule 9 of the Minister’s Determination required the ACPA, , in any recommendation for approval under s 90, that  it be recommended that the approval lapse within six months unless an application for extension is made to the ACPA.  The provisions of rule 9 do not, however, permit the Tribunal to assume for itself a further jurisdiction, to grant an extension of time, after determining the application before it.  The Tribunal’s function in reviewing the ACPA’s decision to recommend rejection of the applicant’s application is limited to a consideration of that decision, as the ACPA submitted.  It follows that any decision by the Tribunal by which it refers to itself, the power to grant an application for extension is beyond its powers as provided by s 43.

As I have said, there was no dispute about this matter.  The appeal should be allowed and the Tribunal’s decision under par(b)(ii) set aside and in lieu there be substituted the following:

“(ii)       This recommendation for approval shall lapse if the applicant has not been granted approval within six months after the date of the Tribunal’s decision or such further period as the ACPA allows on application by the applicant.”

Mr Low’s Cross Appeal and Application for Extension of Time to Appeal
Mr Eaves submits that Mr Low was never required to be a respondent to the appeal and is therefore not able to bring a cross-appeal under O 53 r 13.  That rule provides that a respondent may bring a cross-appeal (there described as a notice of contention).  If Mr Low had the necessary status to bring a cross-appeal, such a document was filed by him within time. 

Order 53 rule 5(2) requires that each party to the proceeding in the Tribunal “who is affected by the order sought by a notice of appeal” shall be joined as a respondent to the appeal.  It is submitted for Mr Eaves that, whilst Mr Low might be said to be affected by the recommendation made by the Tribunal, he was not affected by the order sought by the ACPA by the notice of appeal, which was limited to requiring any later application for extension to be brought to the ACPA and not the Tribunal.  Indeed, Mr Low’s submissions, by which he sought to establish he was affected by the order sought, relied upon the grant of any extension of time as sufficient.  That an extension might be granted was not however an issue on the appeal.  The only issue was as to the identity of the body which might grant it.  That does not affect Mr Low.  In my view Mr Low did not have an entitlement to cross appeal as a respondent to the ACPA’s appeal.

That is not however an end to the matter for Mr Low submits that he ought, in that circumstance, be given an extension of time to bring an appeal with respect to the Tribunal’s decision.  In the circumstances of the case I consider that course is justified.  The appeal seeks to argue the question dealt with by the Tribunal namely, how the question whether Mr Eaves had a legal right to occupy the premises was to be satisfied.  And it seems to me that Mr Low, whilst pursuing the wrong course, was not dilatory.  After he received a copy of the ACPA appeal, and on 11 July 1997, he filed a cross appeal and an application for judicial review, to which I shall later refer.  On 31 July 1997 he filed an application for extension of time to appeal.  Mr Eaves could hardly say that he believed Mr Low was not further pursuing the argument which had been advanced in the Tribunal.  Mr Eaves pointed to some action taken by him since the Tribunal decision.  He has had meetings with the developers and consultants and has applied to a bank for a line of credit.  He also said that he has expended large amounts of money, but it seems to me he would have done so regardless of any action or inaction on the part of Mr Low and in order to obtain approval. 

The Substance of the Appeal
Mr Eaves’ rights under the lease were not in issue.  The point raised by Mr Low is that the legal right to occupy must include an ability lawfully to use the premises under the town planning scheme.  This is so in particular, it was submitted, because the legal right to occupy is to be seen as one for the purpose of dispensing pharmacy benefits.  If there were not that ability lawfully to use the premises, the approval recommended by the ACPA would be meaningless.  On that construction of the requirement of the rule, the Authority would be required to recommend approvals which might have no reasonable prospect of being taken up. 

It is to be observed that the rules under the Minister’s determination are not expressed to require a legal right to use the premises, but one to occupy them.  The latter would be satisfied by reference to rights of ownership or tenancy.  There is nothing in the rules which would support the more stringent construction contended for by Counsel for Mr Low.  The submission that questions to be addressed by the ACPA under the rules, such as need, proceed upon an assumption that that need would be met if the recommendation and subsequent approval were granted is, I consider, met by considering the Secretary’s powers.  In this respect whilst the terms of rule 6 (and rule 5) would not permit the ACPA to withhold a recommendation of approval, on the basis that there was some outstanding town planning consent or other statutory approval necessary, those matters are to be considered by the Secretary under s 90(4) (and see also in this connexion the observations of French J in Pharmacy Restructuring Authority & Anor v Chatfield (1993) 43 FCR 418, 435). The Secretary could, under sub-s (4) or (3B) of that section refuse an approval where the pharmacist could not show that pharmaceutical benefits could be lawfully dispensed at the premises in question. If the same argument, one which required certainty that pharmaceutical benefits could be dispensed at the point when the ACPA’s recommendation was made, was applied to the pharmacist’s town planning application, it might also be rejected. It seems to me that the rules were intended to establish a minimum requirement at the point where the ACPA considered the application. It is noteworthy that the rules also provide for extensions of time with respect to the lapse of any recommendation for approval. This may be the period when other approvals are obtained. If the pharmacist is not then able to show the Secretary that the approval will be able to be utilised, to meet the public need, there remains the prospect of refusal.

In these circumstances, it does not seem to me that a construction which gives the words in rules 5 and 6 only their usual meaning and no more, would render nugatory the purpose of the legislative scheme.  I do not consider that the Tribunal’s refusal to determine the likelihood of rezoning approval, or to take it into account as a relevant factor, was in error.

Application for Judicial Review of the ACPA’s Decision
Mr Low also seeks an extension of time to bring an application to review the decision of the ACPA to defer consideration of his application, pending finalisation of the processes of review of Mr Eaves’ application.  In this respect Mr Eaves’ preliminary point was that Mr Low could not be said to be a “party affected” by that decision since he had not himself shown a legal right to occupy his proposed premises.  That point was however dealt with by the tender, on the hearing, of a lease relating to those premises. 

Mr Low was notified that his application would not be considered, in the first instance on 26 August 1996. When Mr Eaves’ appealed to the Tribunal the ACPA notified Mr Low again that his application could not be considered until that process had concluded.  At no time did Mr Eaves seek to challenge the ACPA’s decision to defer, an approach which Mr Low now contends was erroneous for the reason that it took into account the order in which applications were received and the fact that Mr Eaves’ application was in process.  As a result Mr Eaves has pursued his rights through the Tribunal and to this Court over a period of almost a year, without these questions having been raised.  In my view the time to have brought these proceedings and to have sought a determination of the two applications on their merits was when Mr Low was first advised of the approach taken by the Authority.  I do not consider it to be a satisfactory answer that Mr Eaves’ application may not have been successful before the Tribunal.  All that really means is that Mr Low sought to retain a point in the event of being unsuccessful before the Tribunal, in circumstances where the proceedings before the Tribunal would have been affected if orders requiring the ACPA to determine Mr Low’s application had been sought.

I would not be inclined to extend time pursuant to s 11(c) of the Administrative Decisions (Judicial Review) Act, 1977 (Cth) almost 11 months after the required period of 28 days from communication of the decision in question.  Although not essential to these reasons, it is appropriate to take into account the merits of the application (Hunter Valley Developments Pty Ltd v Cowan (1984) 3 FCR 344, 348-9.) There is, at the least, considerable doubt about the prospects of success of an argument which would require the ACPA to halt the consideration of an application earlier received on the basis that another had been received. Not only would it likely create administrative difficulties, it seems to me that it proceeds upon an incorrect assumption, namely that there is to be gleaned from the statute and rules an intention to determine contesting applications on their merits. Another way of viewing the matter is to consider the basis for the application for review, which has regard to the reasonableness of the ACPA’s delay in considering the second application. Here the ACPA did so, with respect to Mr Low’s application, whilst review and appeal processes were undertaken with respect to Mr Eaves’ application. It could not be said that the ACPA was capricious or unreasonable in determining to delay its decision-making (see Thornton v Repatriation Commission (1981) 35 ALR 485, 492; Raw v Pharmacy Restructuring Authority (unreported decision of Lockhart J 25 June 1993); Rogers v Australian Community Pharmacy Authority (1996) 42 ALD 1, 3-4). The only basis upon which the applicant could contend it was erroneous is with respect to the Tribunal’s belief that that was a course which was lawfully open. But then, as I have said, Mr Low made no challenge to that until very recently.

Orders to be made
On the ACPA’s appeal I would allow the appeal;  set aside para (b)(ii) of the decision and substitute the provision set out above.  I have granted Mr Low’s application for leave to appeal that decision, but concluded that the appeal ought to be dismissed with costs.  Mr Low’s application to extend the time for the bringing of judicial review proceedings with respect to the ACPA’s decisions of July and August 1996 is refused, with costs.

I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel

Associate:
Dated:            24 September 1997

Counsel for the Applicant:	Mr C Erskine and Mr A Brown
Solicitor for the Applicant:	Comino & Cominos for Mr Low
Counsel for the Respondent:	Mr P Munro
Solicitor for the Respondent:	Australian Government Solicitor for the Australian Community Pharmacy Authority
Counsel for the Respondent	Mr J Logan
Solicitor for the Respondent	McCarthy & Holzberger for Mr Eaves
Date of Hearing:	4 September 1997
Date of Judgment:	24 September 1997